Hero Motors IPO launches with neutral analyst ratings and a 28% grey market premium

Hero Motors Ltd’s IPO, sized at ₹1,000 crore, opened with a price range of ₹79-84 per equity share and will remain open until September 18. The issue comprises a fresh issue of up to ₹600 crore and an OFS of up to ₹400 crore, where OP Munjal Holdings will divest shares worth ₹395 crore and Hero Cycles Ltd will sell shares worth ₹5 crore. Analysts from SBI Securities and Master Capital assigned neutral ratings, citing modest revenue growth, high reliance on a few customers (61.4% of FY26 revenue from the top five) and valuation multiples that exceed peer averages.

The company’s RONW improved to 8.53% and EBITDA margin to 10.2%, though both remain below peers. Grey-market activity shows the stock at ₹108, a premium of about 28% over the upper band. Proceeds will be used for debt repayment, equipment purchase for capacity expansion in Gautam Buddha Nagar, Uttar Pradesh, and potential acquisitions.